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The great compute lockdown: How Big Tech is fortifying AI's future
Remember when the internet was an open platform where anyone with a decent computer could build the next big thing? Well, those days are officially over in AI land. We're witnessing the mother of all infrastructure grabs, with over $500 billion in deals reshaping how artificial intelligence gets built and who gets to play in the game. The result? A compute arms race that looks less like the open internet and more like a walled fortress Half a trillion and counting: In just weeks, Big Tech companies have announced over $500 billion in AI infrastructure deals. Oracle struck a record $300 billion deal with OpenAI Nvidia is preparing a $100 billion investment in the ChatGPT maker (while also backing Intel) Meta and Google tied up in a $10 billion cloud deal Tesla signed a $16.5 billion semiconductor supply agreement with Samsung This isn't just corporate dealmaking…it's infrastructure warfare. And the battlefield? Those precious GPUs, data centres, and cloud capacity that make AI magic happen. Enter Uncle Sam: Washington isn’t just cheering from the sidelines. The US government recently acquired a 9.9% stake in Intel for $8.9 billion, directly tying semiconductor self-sufficiency to AI security. Add the $52 billion CHIPS Act, and you've got Uncle Sam saying: "AI runs on American silicon, period" Why it matters: This is not just about cloud contracts; it’s a mutual dependency as a strategy. OpenAI secures guaranteed scale at predictable costs Oracle gains relevance in a market dominated by Microsoft and Amazon Nvidia locks in demand for its newest GPUs Compute power has become the rarest strategic resource in AI. Running large models isn’t possible without endless racks of GPUs, hyperscale data centres, and (let’s not forget) gigawatts of electricity. Global ripple effect: Unlike the open internet era, AI is consolidating into walled gardens. Few winners, higher costs, and centralised power While the US fortifies its AI infrastructure, the rest of the world is scrambling. China is accelerating domestic chipmaking to reduce dependence on American GPUs. The EU is floating state-backed AI funds to compete with US dominance. The Stargate project, a joint venture between OpenAI, Oracle and SoftBank planning up to $500 billion for AI data centres, perfectly captures this moment. The scale is so massive that only a handful of players can even participate. The bottom line: AI is no longer an open frontier. It’s becoming a walled garden of compute, built with half a trillion dollars, fortified by US policy and controlled by a handful of giants. The big question: does this speed us toward AGI… or lock the future of AI inside a fortress few can enter? More on this here Was this newsletter forwarded to you? You can sign up for the AI Edge here
September 26, 2025
India’s AI frenzy, public and private
Just when you thought India’s AI scene couldn’t get any louder, the government turned up the volume. While VCs can’t stop wiring money to anything with “AI” in the pitch, the government just dropped its own big bet: a fresh line-up of partners to build sovereign foundational models, including a trillion-parameter giant. Private money and public muscle are suddenly moving in sync, and the timing couldn’t be better Sovereign AI gets serious: The IndiaAI Mission has picked a new cohort to build foundational LLMs. The new players include: IIT Bombay’s BharatGen consortium, Tech Mahindra, Fractal Analytics, Avataar AI, Zeinteiq Aitech, Genloop Intelligence, NeuroDX, and Shodh AI. The headliner? IIT Bombay’s BharatGen, which will attempt a trillion-parameter model, India’s biggest yet. Backed by nearly Rs 1,000 crore in support and clusters of H100 GPUs, BharatGen will also spin out domain-specific LLMs for agriculture, governance, finance, health, law, and education Also read: IIT Bombay's BharatGen bets on trillion-parameter ‘mother model’ to power India’s AI ecosystem Fractal’s healthcare play: Fractal Analytics, meanwhile, will focus on healthcare. The company aims to build a suite of reasoning LLMs, up to 70 billion parameters in size, that can power medical diagnosis, personalised treatment, drug discovery, and optimised clinical workflows for India. It will receive 4096 H100 GPUs over nine months, with total IndiaAI support pegged at Rs 34.58 crore Also read: Fractal to release 'significant deployable reasoning AI' by year-end, once resources are in place, says CEO Srikanth Velamakanni The government’s stance: Union minister Ashwini Vaishnaw says India needs both mega-models and smaller domain-specific ones, with multiple homegrown foundational LLMs expected to be ready by the AI Impact Summit in February 2026. The government will also develop more than 500 data labs under the IndiaAI Mission to boost talent and infrastructure for artificial intelligence, Vaishnaw said Meanwhile, VCs can’t stop writing AI cheques: On the private side, things look very different, but just as frenzied. More than 12 new AI startups are prepping seed rounds. Peak XV is circling Claim Health, Cubic, Theta Software, Cua, and Coinvent AI Elevation Capital is negotiating with ScalarField, Sookti AI, and Synth Bio Kalaari, BoldCap, Zeropearl and others are chasing bets like SuperMemory, Superbryn, Sherlocks AI, and Affluense AI Most of these sub-$5 million early-stage bets are on AI agents or their development tools, with companion AI, apps designed as human-like friends or caregivers, emerging as the latest obsession. Why's everyone obsessed with AI companions? Here's where it gets interesting (and maybe a little sad?). Companion AI is absolutely exploding right now. Kavana, an AI companion platform that's building "AI humans" for conversations, has both Lightspeed and 3one4 Capital knocking on their door. The truth? People are lonely. Like, really lonely. And they're turning to AI companions for someone or something to talk to The eldercare space is particularly hot, which makes total sense when you think about it. AI companions that can provide consistent, patient interaction? That's solving a real problem. Numbers don't lie: In just the first seven months of this year, Indian AI startups raised $665 million across 109 deals. That's a 46% jump from last year's $455 million across 95 deals The average cheque size? Up 24% from $4.9 million to $6.1 million Some VCs are camping out in the US, picking startups from Y Combinator's Demo Day and signing checks on the spot (major 2021 crypto vibes). Was this newsletter forwarded to you? You can sign up for the AI Edge here
September 20, 2025
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